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EXHIBIT 10.34
KEY EXECUTIVE SEVERANCE AGREEMENT
This Key Executive Severance Agreement (the "Agreement") is dated as of
September 4, 1996, and is made by and between Dove Audio, Inc., a California
corporation (the "Company"), and Xxxxxx Xxxxxx who is presently Chairman of the
Board of and a consultant to the Company (the "Executive").
WITNESSETH:
WHEREAS:
A. The Executive is Chairman of the Board of and a consultant to the
Company and an integral part of the Company's management.
B. The Company wishes to assure both itself and the Executive of
continuity of management generally, including continuity of management in the
event of any actual or threatened change in control of the Company.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and in further consideration of services performed and to be performed
by Executive for the Company, it is hereby agreed by and between the parties as
follows:
1. Company's Right to Terminate. The Company may not terminate the
consulting arrangement with Executive unless, to the extent provided for herein,
the Company provides the benefits hereinafter specified in accordance with the
terms hereof.
2. Event. For purposes of this Agreement, an "Event" shall have the
meaning set forth in the Company's 1994 Stock Incentive Plan as in effect on the
date hereof.
3. Termination of Consulting Arrangement.
(a) If an Event shall have occurred while Executive is a consultant
to and Chairman of the Board of the Company, upon the subsequent Termination of
the Consultancy of Executive within one (1) year of such Event, Executive shall
be entitled to receive the benefits provided in Section 4(a) hereof.
(b) If there shall be a Termination of the Consultancy of Executive
under any circumstances other than as set forth in Section 3(a) hereof,
Executive shall be entitled to receive the benefits provided in Section 4(b)
hereof.
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(c) The phrase "Termination of the Consultancy" of Executive for
purposes of this Agreement shall mean:
(i) Termination by the Company of the consultancy of Executive
for any reason other than death, Disability, Retirement or for Cause as defined
below; or
(ii) Termination by the Executive of his consultancy to the
Company within three (3) months of the occurrence of any of the following
events:
(A) The assignment to Executive of any duties materially
inconsistent with his positions, duties, responsibilities and status with the
Company immediately prior thereto, or a material change in Executive's reporting
responsibilities, titles or offices as in effect immediately prior thereto, or
any removal of Executive from or any failure to appoint Executive to any of such
positions, except in connection with the termination of Executive's employment
due to death, Disability, Retirement or for Cause;
(B) A material reduction by the Company in Executive's
consulting compensation as in effect on the date hereof or as the same may be
increased from time to time;
(C) Subsequent to an Event, the failure by the Company to
continue in effect any benefit or compensation plan, stock ownership plan, stock
purchase plan, stock option plan, life insurance plan, health-and-accident plan
or disability plan in which Executive is participating at the time of an Event
(or plans providing him with substantially similar benefits), the taking of any
action by the Company which would materially adversely affect Executive's
benefits under any of such plans or deprive Executive of any material fringe
benefit enjoyed by him at the time of the Event;
(D) Any purported termination of Executive's consultancy
which is to effected pursuant to a Notice of Termination satisfying the
requirements of Section 3(e) below; and for purposes of this Agreement, no such
purported termination shall be effective.
(d) The words "Disability,: "Retirement" and "Cause" for purposes of
this Agreement shall mean:
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(i) Disability. Termination by the Company of Executive's
consultancy based on "Disability" shall mean termination because of Executive's
absence from his duties with the Company (or its subsidiaries) on a full-time
basis for 130 consecutive business days, as a result of incapacity due to
physical or mental illness, unless within thirty (30) days after Notice of
Termination (as hereinafter defined) is given following such absence Executive
shall have returned to the regular performance of his duties.
(ii) Retirement. Termination by the Company of Executive's
consultancy based on "Retirement" shall mean termination in accordance with the
Company's retirement policy (as if Consultant were an employee), including early
retirement, generally applicable to its salaried employees.
(iii) Cause. Termination by the Company of Executive's
consultancy for "Cause" shall mean termination upon (A) the willful and
continued failure by Executive to substantially perform his duties with the
Company (or its subsidiaries) other than any such failure resulting from his
incapacity due to physical or mental illness, after a demand for substantial
performance is delivered to Executive by the Chief Executive Officer of the
Company, which specifically identifies the manner in which Executive has not
substantially performed his duties, or (B) the willful engaging by Executive in
misconduct which is materially injurious to the Company (or its subsidiaries),
monetarily or otherwise, and that constitutes on the part of Executive common
law fraud or a felony.
(e) Any purported termination by the Company pursuant to Sections
(c)(i) or 3(d) above, or by Executive pursuant to Section 3(c)(ii) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's consultancy under the provision
so indicated.
(f) "Date of Termination" shall mean (i) if Executive's consultancy
is terminated for Disability, thirty (30) days after Notice of Termination is
given (provided that
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Executive shall not have returned to the performance of his duties on a regular
basis during such thirty(30) day period), and (ii) if Executive's consultancy is
terminated for any other reason, the date on which a Notice of Termination is
given.
4. Certain Benefits Upon Termination.
(a) If there is a Termination of the consultancy of Executive as
provided in Section 3(a) hereof, Executive shall be entitled to the following
benefits:
(i) The Company shall pay Executive his full consulting
compensation through the Date of Termination at the rate in effect at the time
Notice of Termination; and
(ii) The Company shall pay Executive his full consulting
compensation on a bi-weekly basis at the rate in effect at the time Notice of
Termination is given for a one-year period following the Date of Termination.
(b) If there is a termination of the consultancy of Executive as
provided in Section 3(b) hereof, Executive shall be entitled to the following
benefits:
(i) The Company shall pay Executive his full consulting
compensation through the Date of Termination at the rate in effect at the time
Notice of Termination is given; and
(ii) The Company shall pay Executive his full consulting
compensation on a bi-weekly basis at the rate in effect at the time Notice of
Termination is given for a period of three months following the Date of
Termination.
5. Mitigation of Damages. Executive shall not be required to mitigate
the amount of any payment provided for in Section 4 by seeking other employment
or otherwise, nor shall the amount of any payment provided for in Section 4 be
reduced by any compensation earned by Executive as the result of employment by
or consultancy to another employer after the Date of Termination, or otherwise.
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6. Successors; Binding Agreement.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance reasonably satisfactory to Executive, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place.
(b) This Agreement shall inure to the benefit of and be enforceable
by Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive should die
while any amount would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to his devisee, legatee or other
designee or, if there be no such designee, to his estate.
7. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, in the records of
the Company.
8. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Executive and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement; it being understood that this Agreement shall not
provide or constitute any term of employment or consultancy to Executive, only
certain severance provisions in the case of termination under certain
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circumstances. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have agreed as set forth above.
DOVE AUDIO, INC.
By /s/ XXXXXXX XXXXX
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Title
Executive:
/s/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx
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